Taxing Life-Saving Medical Devices

The Manhattan Institute study said, “In 2009. the medical device industry provided well-paying jobs to more than 409,000 employees, who earned more than $33 billion in labor compensation. Under reasonable assumptions, the tax could result in job losses in excess 43,000 and employment compensation losses in excess of $3.5 billion.”

States with large employment in the medical device industry will be especially hard hit, from California to Florida. The tax will be particularly harmful to companies that “innovate and tend to suffer loses in the first years or when investing in research and development for a new product but would still be required to pay the tax,” the study said.

With the tax, manufacturers in this country “will be more likely to close plants in the United States and replace them with plants in foreign countries….U.S. leadership in this industry could be threatened.”

The excise tax “will substantially harm the American consumer, the medical device manufacturing industry, and workers in that industry.” The new tax will be applied “to all sales of a product before other forms of state and local taxes are applied.” The government has used excise taxes on gasoline to help build roads and applied “sin” taxes to alcohol and tobacco which the government was seeking to discourage. But this excise tax on medical devices is unique in that it is designed solely to raise revenue.

The industry is one of the healthier segments of manufacturing. Medical devices are distributed through wholesale distribution networks, the study explains, “which likely add an additional 34% or $39 billion to the value of medical devices.”

The study said, “Excise taxes are known to be inefficient.” They “not only distort economic decisions, but they affect all firms, whether they are profitable or not.” A company losing money will still owe the tax. A company might have a large market share, but no profits, in the years when research and development occurs. “Thus, the market share tax could be an unintentional tax on innovation.”

If 15 percent of the production of the industry “were to migrate offshore as a result of the excise tax, U.S. industry employment would decline between 63,000 and 85,000 while employment compensation” would drop between “$5 billion nd $7 billion,” the study said.

Unfortunately, as these findings indicate, the human toll of ObamaCare will be felt in more areas than one.

Tait Trussell is a national award-winning writer, former vice-president of the American Enterprise Institute and former Washington correspondent for The Wall Street Journal.

StephenD

"With the tax, manufacturers in this country “will be more likely to close plants in the United States and replace them with plants in foreign countries….U.S. leadership in this industry could be threatened.” The excise tax “will substantially harm the American consumer, the medical device manufacturing industry, and workers in that industry.”

Would an avowed Communist have done any different to subvert America? Tell me ONE THING this Administration has done that a Socialist, Anti-American Operation would not have done. He is doing exactly what his handlers instruct him to do. Woe to America if he gets re-elected.

oldtimer

Without life saving devices, guess what happens?! No life saving. Is this a form of population control? Who needs health insurance if there are no tests and proceedures because the companies who provide the means necessary for them are out of business?

JoC

I also believe that consumers will have to pay taxes on certain procedures like MRIs.
I subscribe to a newsletter and they found a 15 member commission that has already been appointed.
There job is to REGULATE –
1) How many doctors we need
2) How much they should earn
3) Where they should work
4) What kinds of treatment they should AND should NOT give you

In Britian, a woman who was very ill with cancer found out that her insurance company no longer covered the drug she needed. It was critical for her treatment so the family decided to pay out of pocket but the COMMISSION WOULD NOT ALLOW IT!!! They wanted everything to be EQUAL!!! They didn't think it was FAIR for this woman to have access to the drug when there were others who couldn't afford it. So they made her choose between the two. She could not have both!!! The woman died.http://www.timesonline.co.uk/tol/life_and_style/h…

The truly frightening thing about all of this is that this is just the beginning. Obama's staff is looking for all kinds of new ways to generate revenue, and they can't do that with people who don't work or are living below the poverty level. We need to save this country for our kids. There are resources out there that can help with this, including publications like The Conservative Teen. Check it out online. The social and political issues it addresses for future generations are so important, critical even. You can find it at http://www.theconservativeteen.com/toc.